Hello and welcome back!
After introducing Taobao and going over exactly what it is in Part 1, as well as finding three highly regarded buying agents to use for our experiment, it’s now time to take a look at pricing!
After all, is there any point to Taobao if it can’t beat the pricing of a site like AliExpress, where everything is in English, you can simply pay using your own credit card, and no buying agent is required?
So without further ado, let’s get to it!
Really there were three different sites that I could have used as the “competitor” to Taobao in our pricing experiment – Alibaba, AliExpress, and eBay.
I decided that from the three, AliExpress is the fairest as:
a) Taobao is geared towards single quantity orders, not wholesale, so Alibaba is out!
b) Taobao is obviously based in China, which eliminates eBay. So that means the fairest comparison for us is AliExpress.
Alright, let’s get started with product no.1:
*Please note – I am not considering the viability or profitability of these products at all – they are chosen at random in order to compare pricing, and nothing more.
Syma X5SW RC Camera Drone
As you can see from the below screenshot, this item is readily available from AliExpress for $75 including shipping which gives us a price of £50 (at 1 GBP = 1.5 USD)
Searching for the product on Taobao produces a number of results, some initially appearing at a much lower price! But looking further I immediately see that these are for a cheaper model than the X5SW being offered on AliExpress:
For the exact model we’re looking for, I find a listing for ¥379.00, which converts to £39.39 (at 1 GBP = 9.6 CNY):
Then using Taobao Focus’ shipping calculator, we get an estimated shipping cost of between 96 CNY – 181 CNY using China Air Mail:
I’m going to take the mid-point of 139 CNY, which is £14.48.
So let’s work out the total Taobao price now:
- £39.39 – Item Price
- £3.94 – Commission
- £14.48 – Shipping
£57.81 – TOTAL = 15.6% HIGHER than AliExpress
Round 1 Winner – AliExpress
Let’s move on to round 2:
Kangertech Subox Nano E-Cig Starter Kit
There is quite a large range of prices for this product on AliExpress, but I found one for $69 (£46) including shipping to the UK, which is what we’ll be using for our example:
After spending some time looking through Taobao (where again there is a large discrepancy in the price offered by different sellers, so I suspect there are a few fakes floating around for sale) I found a seller offering the set for 269 Yuan with free domestic shipping (269 Yuan = £28.02):
Then heading back to Taobao Focus’ shipping calculator, we get an estimated delivery cost of 79 CNY.
That gives us a total Taobao price of:
- £28.02 – Item Price
- £3.65 – Commission (this is obviously higher than 10%, but remember there is a minimum commission amount, which applies in this case).
- £8.23 – Shipping
£39.90 – TOTAL = 13% LOWER than AliExpress
Round 2 Winner – Taobao
So a good win for Taobao in round 2!
For our next product I want to test something lower in value, so I’m going to take a look at an ever popular product for newbie sellers:
MacBook Hard Cover Case
As expected there are loads of sellers on AliExpress for this product, but one appears to be running a sale at the moment, so we’ll use them to make it extra difficult for Taobao:
At $9.50 shipped to the UK – that gives us a price of £6.33.
I was easily able to find a number of listings on Taobao for very similar looking products (frosted design, matte, hard cover etc.) and the price was also very consistent throughout, at 25 Yuan (£2.60) for the plain coloured designs:
This price includes domestic shipping, so we just need an estimated international shipping cost for our final calculation. Once again we head back to Taobao Focus and this time it suggests 62 Yuan for shipping to the UK via China Air Mail, giving a total of:
- £2.60 – Item Price
- £3.65 – Commission (Yep, the commission is higher than the cost of the actual item, which is the problem with these cheaper products).
- £6.46 – Shipping
£12.71 – TOTAL = 100% HIGHER than AliExpress
So at first glance, this was terrible from Taobao, working out double the price of AliExpress with all the extra hassle on top!
However I already knew this would be the case, as really the whole system is unusable for low cost items. For such products shipping already accounts for a large percentage of the final cost, so to ship it twice, and to also add the minimum commission, will always make it unviable.
And this product is a perfect illustration of this, as from the final cost of £12.71 the actual item only accounts for 1/5th of that!
As an added experiment, let’s see what an order of 10 items comes out to using Taobao:
- £26 – Cost of Products
- £3.65 – Commission
- £31.25 – Shipping
= £60.90 TOTAL = £6.09 Per Piece
So as you can see a £60 order has halved the cost per product, and actually puts it just below AliExpress.
But that’s not what today’s article is all about, as we are comparing them like for like with single quantity orders, and in the interest of fairness I have to give round 3 to AliExpress.
Round 3 Winner – AliExpress
And actually this third product leads me perfectly to my final thoughts/conclusion – like most things in life, there is no one clear answer here… sometimes Taobao is much cheaper as everyone claims, but that’s certainly not always the case and for the low cost items in particular the whole idea is a bit of a non-starter, at single quantities at least.
If pushed, I would have to say that I don’t really see the point of Taobao for single items, as it’s simply not worth all the extra hassle. But from a business standpoint and to try and find new suppliers who may not be using international sites like AliExpress or even Alibaba, then it may be worthwhile.
Of course this all depends on the quantity you’re looking to buy and the specific product in question – after all from testing just three items we’ve seen a range of 13% cheaper to 100% more expensive!
My apologies to those of you who were looking for a clear-cut answer of “Yes, use Taobao as everything is much cheaper” or “No, stick with AliExpress as Taobao and these buying agents are a rip off” but unfortunately it’s just not as simple as that.
But what about at much larger quantities, say 500+? After all we saw a big drop in the cost per piece for the MacBook cases when we ordered 10 instead of 1… will it be similarly worthwhile from 10 to 500?
You can find out in Part 3 of this Taobao series, where we’ll delve deeper into larger quantity orders, and see how Taobao (and its surprise partner) stack up in that regard!
Part 3 comes out on Friday, so don’t miss it!
All the best,